Why a Franchise Brand Might Crash and Burn

Brant Kelsey / March 18, 2015

They wanted to be cool. They wanted to be relevant. They wanted to be up-to-date and different. They wanted to be J.C. Penney, sure, but with their 2010 annual sales falling, they wanted to remake their 110-year-old brand into a department store fit for the 21st century.

So they hired CEO and former Apple retailer, Ron Johnson. And the rest is history – but not a good one. What made JCP crash and burn?

Johnson had some radical ideas. He wanted nothing to do with coupons, sales, rebates, and all the usual discounts associated with conventional department stores. Instead, he wanted “monthly promotions,” promotions that discounted seasonal items without a coupon. He wanted more in-house brands, such as St. John’s Bay and Martha Stewart. He wanted a new J.C. Penney.

And he got it. At the end of 2011, Penney’s released a new ad with the tagline, “Enough is Enough.” Coupons floated around the ad’s white space, coupons of usual form: tags, cutouts, barcodes. But instead of reduced numbers, they read “No.” In effect the ad said, “J.C. Penney has heard your cries. We are finally eliminating our coupon system.”

Customers were confused. They were shocked. They felt misunderstood. No one, they thought, disliked a J.C. Penney coupon. No one wanted a different J.C. Penney. No one wanted a new system.

Before Johnson became CEO, Penney’s pulled in $17 billion in annual sales. At the end of 2012, that number dropped to $12.9 billion. In one year, their stock dropped 62%. Johnson got a new Penney’s, alright, but he left a mass majority of faithful customers out of it.
What happened? Johnson did what no brand can afford to do: he undermined the brand’s core values. He changed too much too fast. And the change caused a brand inconsistency.

For a Franchise, What is Brand Consistency?

Though J.C. Penney is not a franchise, their branding mistake can easily apply to franchises. When a franchise acts out of character, when it does or sells something unusual, when its actions contradict its message, we call that a brand inconsistency. Brand consistency, then, is repeated brand activity: the franchise communicates its core values and message over and over, solidifying its identity in the customer’s mind. “McDonalds? Fast hamburgers.” “Subway? Fast subs.” “Starbucks? Fast coffee.”

For a franchise, inconsistencies are somewhat different, and if the franchisor is not careful, more disastrous. As with branded items, inconsistencies can arise from the introduction of bizarre and self-contradictory products. McDonald’s, for instance, still struggles to integrate healthy food into its usual “fast, unhealthy food” connotations.

More often than not, however, inconsistencies arise when franchisees contradict the overall brand, which, in turn, upsets the customer’s expectations. Slow service. Dirty bathrooms. Poor employees-customer interactions. When our experience of the franchisee contradicts the franchise, we feel wronged: the franchise promised us an experience for our dollars. And we expect to get that experience.

The Power of Consistency

A franchisee, then, strives for consistent positive encounters with its customers. Memorable moments are what they want, moments that stick with the customer, moments that continually remind them, “every time I go into Chick-Fil-A, no matter where I am, I’m given great customer service.”

We all know a customer’s experience is one of the most important points of exposure to a brand. However, consistency starts with the signage, ads, uniforms, store fronts, etc. While the experience may keep the customer coming back, the subconscious association that customer has with your visual brand, will assure the customer that any location will provide them with the same service.

When franchisees create positive experiences, customers return. And not just to their local franchisee. They’ll return to the franchise in different cities, different states, different countries. That’s the power of consistency: it keeps customers loyal to the franchise.
Consistency creates loyalty, and if you deliver that experience repeatedly, customers will return.

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